PHARMSERVICES LTD

Executive Summary

PHARMSERVICES LTD demonstrates strong liquidity and improved working capital, reflecting a “healthy cash flow” position. However, a significant decline in fixed assets and net equity indicates underlying challenges or asset restructuring, warranting further analysis and strategic response. Addressing these issues while maintaining liquidity discipline can enhance the company’s financial resilience and growth potential.

PHARMSERVICES LTD - Analysis Report

Company Number: 13643650

Analysis Date: 2025-07-29 18:36 UTC

Financial Health Assessment: PHARMSERVICES LTD (as of 30 September 2024)

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1. Financial Health Score: B-

Explanation:
PHARMSERVICES LTD demonstrates a generally stable financial position for a micro-entity, with positive net current assets and no current liabilities as of the latest financial year. However, the significant drop in fixed assets and net assets compared to prior years signals caution. The company’s liquidity (ability to cover short-term obligations) appears healthy, but the shrinkage in total net assets suggests underlying operational or investment challenges. The absence of current liabilities is a positive “vital sign,” but the asset reduction requires monitoring.

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2. Key Vital Signs

Metric	2024 (£)	2023 (£)	Interpretation
Fixed Assets	8,420	25,992	Sharp decline (~68% drop), possibly asset sales or write-downs; “loss of muscle”
Current Assets	9,142	4,691	More than doubled, indicating improved short-term cash or receivables (“healthy cash flow”)
Current Liabilities	0	6,707	Eliminated short-term debt, a very positive sign of liquidity improvement
Net Current Assets	9,142	(2,016)	Turned from negative to solid positive; “recovered pulse” in working capital
Total Net Assets	17,562	23,976	Decreased by ~27%, indicating shrinkage of company’s net worth—“weakened core strength”
Shareholders’ Funds	17,562	23,976	Mirrors net assets, reflecting equity value decline

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3. Diagnosis

PHARMSERVICES LTD’s financial “vital signs” show mixed results. The company has successfully eliminated its current liabilities, greatly improving liquidity and short-term financial stability—a vital indicator of “healthy cash flow.” The increase in current assets supports this positive trend. However, the sharp decrease in fixed assets and net assets suggests that the company may have sold or impaired long-term assets or faced operational losses, leading to a reduction in overall net worth.

This pattern could reflect “symptoms of distress” in capital investment or business operations, or a strategic shift in asset management. The company remains solvent and liquid, but the shrinking equity base could limit growth potential or resilience against future shocks.

The company is a micro-entity with only one employee (the director), indicating a lean operation. The director holds significant control alongside another major shareholder, suggesting concentrated ownership which can be both a strength (clear decision-making) and a risk (dependency on few individuals).

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4. Recommendations

• Asset Review & Strategy: Investigate the reasons behind the large decrease in fixed assets. If due to disposals, assess whether reinvestment plans are in place to maintain operational capacity. If impairments or write-downs occurred, identify causes and implement controls to prevent recurrence.
• Profitability Analysis: Review profit and loss statements (not provided here) to understand operational performance impacts on net assets. Address any persistent losses or cost inefficiencies.
• Maintain Liquidity Discipline: Continue the positive trend of keeping current liabilities low and building current assets to ensure ongoing “healthy cash flow.”
• Growth & Capital Planning: Consider strategies to rebuild the company’s equity base, such as seeking additional investment, improving profitability, or prudent cost management.
• Governance & Risk Management: With concentrated ownership, ensure robust governance practices and contingency plans to mitigate risks associated with key individuals.
• Prepare for Growth Phase: As the company matures beyond micro-entity status, prepare for more comprehensive financial reporting and compliance requirements.

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